Existing home sales see strong monthly gain in February

Buyers haven't been waiting for spring weather to get a jump on house hunting, according to the National Association of Realtors.

The organization's most recent report on existing home sales in the United States determined that transactions were on a seasonally adjusted annual pace of 5.51 million in February. This was an 11.8 percent boost from January.

However, the sales rate was also down 1.8 percent from February 2018. This marked the 12th consecutive month where existing home sales have slowed on an annual basis.

Lawrence Yun, chief economist at the National Association of Realtors, credited a number of factors for the boost in sales in February. He said an increase in housing inventory and a decrease in mortgage rates have been positive signs, along with higher household incomes and consumer confidence among buyers entering the market.

The average 30-year fixed rate mortgage had an interest rate of 4.37 percent, according to Freddie Mac. This was down from 4.46 percent in the previous month and 4.54 percent in 2018. There were 1.63 million homes available for sale at the end of February, up from 1.59 million in January and 1.58 million in February 2018.

"For sustained growth, significant construction of moderately priced homes is still needed," Yun cautioned. "More construction will help boost local economies and more home sales will help lessen wealth inequality as more households can enjoy housing wealth gains."

The National Association of Realtors concluded that the typical homeowner in the United States acquired $8,700 in additional wealth through equity gains over the past 12 months. Over the past 24 months, the typical homeowner gained $21,300 in equity.

These equity gains stem from ongoing increases to home values. The median price for an existing home sold in February was $249,500, a year-over-year gain of 3.6 percent. February marked the 84th consecutive month of annual home price increases.

Single-family homes made up the largest share of existing home sales in February, with an annual rate of 4.94 million transactions – an increase of 13.3 percent from January, but a year-over-year drop of 1.4 percent. The median price for a single-family home sold during the month was $251,400, a year-over-year increase of 3.6 percent.

Condominium and co-op sales held steady at an annual rate of 570,000 sales, although this was a year-over-year decline of 5 percent. The median price for a condominium or co-op sold in February climbed 3.1 percent to $233,300.

The typical property sold during the month found a buyer after being listed for 44 days, five days faster than the previous month but a week slower than the previous year. Forty-one percent of homes were sold within a month.

Thirty-two percent of February's sales went to people purchasing their first home. The first-time buyer share was up from 29 percent in both January and February 2018.

Twenty-three percent of the month's sales were made without financing, unchanged from the previous month and down from 24 percent in the previous year. Individual investors, who typically account for many all-cash sales, represented 16 percent of February's sales – unchanged from January and up from 15 percent in February 2018.

Distressed sales represented 4 percent of February's transactions, unchanged from both the previous month and previous year. Three percent of homes sold during the month were foreclosures, while 1 percent were short sales.

The Northeast was the only region with an annual increase in existing home sales, although the rate of sales was unchanged from January. The pace of 690,000 sales was up 1.5 percent from February 2018. The median price for a home sold in the region in February was $272,900, a year-over-year gain of 3.8 percent.

The West had the strongest monthly gain at 16 percent, although its annual rate of 1.16 million sales was still down 7.9 percent from the previous year. The median price for an existing home in the region rose 3 percent to $379,300.

The existing home sales rate in the South stood at 2.39 million, up 14.9 percent from January an inching down 0.4 percent from the previous year. The median sales price in the region was up 2.5 percent to $219,300.

In the Midwest, the annual rate of 1.27 million sales represented a monthly increase of 9.5 percent, although the pace was roughly on par with that of February 2018. The median sales price increased 5.4 percent to $188,800.

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